YB new stock pitches (Thursday, May 22)

Nebius Group (NBIS), an AI cloud and data center company, reported Q1 results with $249M ARR, maintaining guidance of $750M-1B ARR by year-end. At a $39.14 share price and $8.95B market cap, NBIS has $1.5B cash and a 28% stake in ClickHouse valued at $1.6B (recently rumored at a $6B valuation), resulting in a 6-8x EV/ARR multiple based on year-end targets. The company has completed data centers in Iceland and Kansas City with New Jersey coming online soon, and holds stakes in Avride, Toloka (which received investment from Jeff Bezos), and TripleTen. If management hits EOY targets and can monetize its ClickHouse stake, NBIS offers 50-60% upside; however, risks include rapid cash burn, missing ARR targets (which would push the multiple to 12-13x), and uncertainty around stake monetization. The stock remains under-covered by analysts and experiences high volatility (14% range post-earnings), likely to continue in the near term as the market awaits more information or increased institutional coverage.

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Lottomatica Group S.p.A. (LTMC.MI) is Italy's #1 gambling operator with 31% online and 30-40% offline market share, assembled through successful acquisitions under CEO Guglielmo Angelozzi. The company has a superior in-house PEGASOS tech platform that has driven consistent market share gains against competitors like Flutter (growing from 24% to 31% online share since Q1 2022 while Flutter declined from 32% to 30%). Italy's online casino penetration is just 26% compared to 50-60%+ in mature markets, with online gambling generating 2.6x higher EBITDA margins than offline operations. This penetration gap, combined with online advantages (96% payout vs. <85% offline, thousands of game options vs. ~45 offline, and personalized promotions), is expected to drive 7% topline growth but teens EBITDA/FCF growth. The regulatory environment appears stable, with gaming taxes fixed at ~30% online for the upcoming 9-year concession. Stock liquidity is improving significantly as Apollo reduces its stake (from 75% post-IPO to 21% currently), potentially driving a valuation re-rating as larger investors gain access to this $6 billion market cap company. These factors support a potential low 20s IRR for investors.

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SANUWAVE Health (SNWV) is a medical device company focused on its UltraMIST System, a non-contact, low-frequency ultrasound therapy device that accelerates wound healing at 50% of treatment cost versus alternatives. The system delivers ultrasound energy through saline mist, reducing bacteria, enhancing blood flow, decreasing inflammation, and promoting new blood vessel formation for chronic wounds. The company operates on a razor-and-blade model with $35,000 devices and $100 single-use applicators, both at 75% gross margins. CEO Morgan Frank, a healthcare investor with deep expertise, has positioned the company for growth with production capacity reaching 100-120 devices monthly and applicator production scaling to 24,000 weekly by end of 2025. Management forecasts $107.7M revenue in 2025 ($24.5M from devices, $83.2M from applicators) and $168.1M in 2026 ($35M from devices, $133.1M from applicators), with 35% EBIT margins and light reinvestment needs. With targeted 15% FCF yield, this implies a $375M enterprise value (10x FCF) for 2025.

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